We are now entering the golden months for holiday planning and vacation administration This is not the easiest solitaire to lay - especially not if your business is located in multiple countries - with their own specific holiday laws taken into consideration. How familiar are you with the vacation rules in Sweden, Denmark, Norway and Finland?
The Nordic countries have a lot in common. We have lingual similarities, the business cultures are quite the same, and we are all protected by working environment laws to ensure stability and security in the employment relationship. Even though we are in the same boat in so many ways, there are some differences that are nice to be aware of - especially when it comes to the topic of the season; vacation and holiday rules. In this blog post we will address some of the main vacation rules in each Nordic country that you as an employer should be aware of.
The Holiday Acts in all countries have the same purpose in common - to ensure that all employees receive annual leave, and to ensure that the employee has the opportunity to be absent from work financially during the holiday period. But with this being said, the method variates quite a lot from country to country. So how familiar are you with the different vacation rules in the Nordic countries?
Holiday rules in Sweden
Here are the key vacation rules to be aware of in Sweden:
- The law states that all employees are entitled to 25 days off during a holiday year.
- The law also states that employees shall have the opportunity for 4 weeks of continuous holiday leave during the main period, which is from June to August. Through collective agreements or other agreements, the employee may be entitled to more days, for example 28, 30 or 35 days, but you can never agree on fewer days than those specified by law.
- The Swedish Holiday Act counts working days from Monday to Friday. (Unless the employee normally works on weekends).
- All full-time employees are thus normally entitled to 25 days' holiday, but how many of these are paid depends on how much you have worked, or rather how much you have earned. The Swedish Holiday Act talks about earning years and holiday years: The earning year is the year you earn, or work, the holiday and the holiday year is the year you take the holiday. The earning year runs from 1 April to 31 March in year 1, and the holiday year during the same period in year 2. If you work during the entire earning period, without absence that is not based on holiday pay, you will in other words have 25 paid days to take out during the holiday year. Via collective agreements or other agreements, you can deviate from this rule and have coincident holiday and earnings years, often calculated according to the calendar year. Then you do not need to earn the paid vacation days in advance, but do it continuously during the same vacation year as the leave is taken.
- Employees are able to transfer up to 5 days of vacation to the year after and within 5 years.
- The employer must pay out the holiday pay to the employee in connection with the holiday leave.
- When an employee quits, he is entitled to receive holiday compensation (instead of holiday pay) for the holiday that the employee has earned but not used. This could be remaining vacation days for the current year, saved vacation days from previous years or vacation days that have been earned during the current year. The holiday pay for all these days must be calculated according to the same rules as for the holiday pay during employment. The money must be paid to the employee as soon as possible, and no later than the month after he has left.
Holiday rules in Denmark
To begin with, a new Holiday Act was introduced in Denmark in September 2020, and implicates a “simultaneous holiday”, which means that employees earn and take their holiday over the same period. This means that all employees can take paid leave as early as the first year of their employment. - the same year as they earn them. For new employees, this means that they do not have to wait until the next year to be able to benefit from the paid holidays, which is a difference from before. Read more about the new Holiday Act in Denmark here
Here are some holiday rules in Denmark to be aware of:
- Holidays in Denmark are earned from 1 September until 31 August. An employee earns 2,08 days a month equal to a total of 25 days a year. The holiday can be used once they have been earned, but no later than 31 December after the earning period. For example, the 25 days earned from 1 September 2020 to 31 August 2021 shall be used before 31 December 2021.
- The employee can get 5 vacation days transferred or paid out in January if the employee has used 20 days.
- The Danish Holiday Act counts working days from Monday to Friday.
- The Holiday allowance of 1% is earned in the same period. The holiday allowance can either be paid out as a split in May and August or in the month the holiday is used.
- Beside above which is regulated in the Holiday Act, can a company choose to have “Feriefri” days/care days/a sixth vacation week, which is handled according to company rules and not covered by the Holiday Act.
- Full-time employees will just have their normal salary paid out during the paid holiday, while hourly paid employees must apply to have their holiday pay through “Feriekonto”, in connection with their specific vacation days.
Holiday rules in Norway
- In accordance with the Norwegian Holiday Act, employees have a holiday entitlement of four weeks and one day (21 days), and are entitled to 10.2% holiday pay. Companies that operate with 12% holiday pay have usually introduced a holiday entitlement of five weeks for their employees (This means four contractual days in addition to the statutory entitlement).
- The employee can get 10 vacation days transferred to the next year.
- The Norwegian Holiday Act counts working days from Monday to Friday, so one holiday week will correspond to 5 working days.
- In Norway, May 1 and 17 are paid holidays, in addition to other standard international public holidays.
- Employees who have not been in full employment during the accrual year may choose not to take holiday to the extent that the holiday pay does not cover the loss of salary during the holiday.
- The employee has the right to take three consecutive weeks of holiday within the period 1 June to 30 September. This is called the main holiday period. Exact timing within this framework is free for the employer to decide if you don’t agree in the discussion. The employee is also entitled to have the remaining 6 vacation days consecutive, but the employer has again the mandate to decide the exact timing of these vacation days too.
- In Norway, the holiday pay is normally paid out in one go, usually in June.
- It is the Employer’s responsibility to ensure that the employees are taking holidays. Even if the employee is on long term sick leave, the employer should make sure the employee take out holidays if possible.
Read the Norwegian updates: What are the new rules within payroll and HR in 2021?
Vacation rules in Finland
The annual holidays system in Finland varies quite much compared with many European countries and there are many mandatory provisions that cannot be agreed differently. Therefore foreign companies are obliged to follow Finnish provisions as minimum although the company might have strict global policies.
- Holiday credit year is between 1st April and 31st March of the following year. For example, 1 April 2020 – 31 March 2021.
- In Finland an employee earns holidays by working, and the earning is based on either the 14 days´ rule or 35 hours rule.
- An employee has 24-30 vacation days per year depending on the employment duration. In other words, newly hired employees have fewer paid holidays to use than an employee with longer seniority.
- If in accordance with the employment agreement the employee works so few days in a month that there normally is not at least 14 working days, then the employee earns holidays if there is at least 35 working hours per month.
- The employment agreement determines which earning is applied to employment. If the employee earns holidays by 14 days´ rule and for some reason there is a month when the employee does not work at least 14 days, then the employee does not earn holidays during this month. Even if the employee works 35 hours this month, holiday days will not be earned under this rule.
- The employee is entitled to give a request concerning the timing of the holidays but it is a right of the employer to decide the actual time. (This rule applies to all Nordic countries). The notification of the timing of the holidays must be given to the employee no later than 1 month before the start of the holiday. Under certain special circumstances the notification time can be no later than 2 weeks before the start of the holiday.
- As the main rule, 24 days should be granted during a holiday season and rest of the holidays during the winter holiday season.
- The Finnish Holiday Act counts working days from Monday to Saturday, and only a few additional exceptions of “red calendar days”. In practice Saturday has been a problematic day for foreign employers to handle especially in a company where a normal working week is from Monday to Friday. But using vacation days has nothing to do with a normal working week in Finland. Therefore one holiday week takes 6 vacation days although the same calendar week contains only 5 days.
Nordic payroll is our area of expertise
Azets is offering a fully managed Nordic payroll service in Norway, Sweden, Denmark and Finland - the entire Nordic market through one point of contact. Payroll is our area of expertise, which means that we have special competence within HR and payroll in the whole Nordics. Let Azets help you with all your complex payroll matters - we’re here to help you.